Lion Little World Beverages Says New Belgium’s B Corp Status Was a Key Driver of the Acquisition

New Belgium Brewing became a Certified B Corporation in 2013. (Photo courtesy New Belgium Brewing)

New Belgium Brewing, started in a tiny basement in Fort Collins, Colorado, in 1991, is now the fourth-largest craft brewery in the U.S. It is famous for its flagship beers, Fat Tire Amber Ale and Voodoo Ranger IPA, along with a variety of other adored beers. At the same time, it has been recognized as a leader in sustainability and social responsibility. It was the first brewery to join 1% for the Planet, and thereby committing to give 1% of its annual sales to environmental causes, and has been a Certified B Corporation since 2013, shortly after its official transition to 100% employee ownership.

At the end of 2019, New Belgium sold to Lion Little World Beverages. Lion Little World Beverages acquired 100% of New Belgium in an all-cash transaction.

My forthcoming book, Better Business: How the B Corp Movement Is Remaking Capitalism, looks at the growth of business as a force for good, specifically focusing on the B Corp movement and why B Corps, like New Belgium, are a compelling model for the future of sustainable capitalism. Stories like this one about employee-ownership’s impact on wealth distribution and acquisitions highlight ways businesses can create positive outcomes for the many instead of the few.

Below are excerpts from an interview with Katie Wallace and Jennifer Vervier, the current and former directors of social and environmental impact at New Belgium Brewing (Vervier is no longer with New Belgium). The interview has been edited for brevity and clarity.

Can you share how New Belgium became familiar with the B Corp movement? Why did New Belgium decide to pursue B Corp certification?

Jennifer Vervier: In the early days for New Belgium, we looked to companies like Seventh Generation, Ben & Jerry’s, Stonyfield Farms and Patagonia for indications on what the leading edge was in mission-driven business. And, because they are all B Corps, they put B Corp certification on our radar. We reached out to B Lab to talk more about it, and they were mutually interested in having New Belgium be part of the movement.

We were attracted to the idea that through B Corp certification we could institutionalize stakeholder capitalism within the company to ensure our legacy and succession planning. We transitioned to be 100% employee-owned in 2012 and were certified by 2013. Once we made the transition to employee ownership, we felt it was actually more important to become a B Corp because the ESOP fiduciary votes for the shareholders, and we wanted to make sure there was something in the bylaws that could prevent and give pause to the fiduciary if there was a hostile bid. By becoming a benefit corporation, the legal framework for B Corps, we’re explicitly saying that we have other considerations.

I think the benefit corporation legislative changes B Lab is working on are important. The fact that they were actually changing law so that companies did not have to follow shareholder primacy was something that really attracted us to B Corp certification.

Is there any connection between the employee stock ownership plan (ESOP) and B Corp status in your mind?

Katie Wallace: As Jenn previously mentioned, B Corp certification helps to anchor legacy and values into a 100% employee ownership model. Additionally, the 100% employee ownership business model addresses one of the bigger issues of our time, which is wealth inequality. That gap is continuing to grow, and employee ownership provides a way for all employees to share in the companies’ wealth. Giving Americans more access to capital equity growth throughout their careers is a social justice issue in itself, especially as globalization ensues and giant corporations make small business less accessible to American entrepreneurs. The B Corp movement also stands for these principles, and the B Impact Assessment that companies go through to become B Corps gives a lot of points for being employee-owned.

Can you say a little bit more about the employee ownership program and how it impacts decision-making?

Vervier: Employee ownership is not just about the percent of ownership but also how being employee owned affects a company’s culture. To ensure we are making a meaningful difference in coworkers lives, every other year we take a survey from the National Center for Employee Ownership, which specifically focuses on issues of decision-making, transparency, and ownership rights and responsibilities. They have a database of other companies taking it, so you can compare yourselves. That’s been really helpful for us.

While New Belgium only became 100% employee owned in 2012, the practices of transparency and participative decision-making have been present since the beginning. The bedrock came from open-book management and the great team we have for business financial training. One of the fundamental ideas is that people need to understand how the business makes money in order to help the business make money. You have to understand the rules of the game to play the game well.

Participative decision-making is more challenging now, as we are a larger, multisite company in a more challenging business environment. It is different when you are a 40-person company and can gather in the kitchen or are a 700-person company at multiple sites. The actual practice of ownership is more challenging as the company is more specialized and there is more of a need for speed in decision-making.

Can you talk a little on the decision to sell to Lion Little World Beverages?

Wallace: In recent years the craft beer industry became increasingly complex to navigate. Simply being employee-owned or a B Corp does not entirely insulate a company from the often erratic realities of the marketplace. Being 100% employee-owned has numerous perks, but it can make it difficult to raise money for periods of innovation. We felt that our ability to continue our mission and also deliver value to our employee owners would best be served by partnering up with another organization who shared our passion for world-class beer and B Corp values.

Our Board of Directors had a fiscal responsibility to consider all offers that came our way. During one gathering at our founder’s home in Fort Collins, the Lion and New Belgium teams connected on our social and environmental accomplishments and aspirations. Lion’s long list of accomplishments related to climate, equality, and other movements gave us confidence. Lion is an aspiring B Corp and New Belgium is a leading B Corp, and it became clear that we were great partners for one another to elevate this work. Of course, a commitment to our values was a key part of the conversation among coworkers preceding the employee-owner vote.

How was employee ownership a factor in the sale?

Wallace: This sale was a great success story for employee ownership in that more than 300 New Belgium coworkers will receive more than $100,000 in retirement money, with some coworkers receiving quite a bit more. Over $190 million will have been paid out to hundreds of families by the time the deal closes. This is money that founders of a more traditional business could have easily pocketed themselves, so it’s an excellent win for wealth equality. Some possible partners walked away when they learned of the complexities of a coworker vote, but ultimately we landed with the right cultural partner because they valued the culture and engagement born of employee ownership even through the transaction.

How does Lion Little think about New Belgium’s social impact? Will New Belgium continue to pursue its B Corp Certification?

Wallace: New Belgium does plan to maintain our B Corp certification, and the changes we’re seeing to our social and environmental work are that they are getting a great boost in attention and budget from Lion.

Below is a statement from Lion Little World Beverages:

Lion is very interested in B Corp certification and will continue to investigate it as an option to underpin our sustainability credentials. We are currently undertaking a full review of our sustainability strategy and reporting to ensure we have a robust dataset required for any sustainability certification. Visit our media centre to read more about our latest environmental and community initiatives.

We have been inspired by New Belgium’s commitment to B Corp certification and the way in which it underpins all of its business activities. In fact, it was one of the things that initially drew us to New Belgium. Being a force for good in the world is something all businesses should aspire to, and Lion Little World Beverages is committed to supporting New Belgium in this mission.

B the Change gathers and shares the voices from within the movement of people using business as a force for good and the community of Certified B Corporations. The opinions expressed do not necessarily reflect those of the nonprofit B Lab.


How Being an Employee-Owned B Corp Played a Role in New Belgium’s Recent Sale was originally published in B The Change on Medium, where people are continuing the conversation by highlighting and responding to this story.


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